I doubt they fear very much, but this suggests that they should be a little concerned about Costco.
In the world of retailing, Wal-Mart is the unstoppable, insatiable force. With $247 billion in revenues—and growing 15% a year—it reduces downtown shop owners to quivering jelly and once-formidable competitors, like Kmart, to bankruptcy. Wal-Mart CEO Lee Scott rules the commercial strip the way Julius Caesar once ruled the Roman republic.
Except, that is, for a solitary rebel-held province where a company 20% the size of Wal-Mart has made a monkey of the 800-pound gorilla. In the retail niche of warehouse clubs, the irresistible force is an irresolute flailer. During the past ten years Wal-Mart has gone through five CEOs and countless stratagems at Sam's Club trying to assume its customary command. All have been thwarted by Costco Wholesale, the master of the cavernous space.
WalMart is a great company, but like all great companies, they will eventually stumble and fall. I think the groundwork for that is already being laid with competition from companies like Costco, shifts in the way the retail industry works, and consumer backlash (as I have said before, Mrs. Businesspundit hates Walmart). Not that I expect them to go broke anytime soon, but in 30 years, I doubt they will be as dominant as they are today.